News

CEE Fund Advisory founded

Lampe Equity Management GmbH, Bankhaus Lampe’s Hamburg-based investment company, covers infrastructure as well as renewables, shipping, real estate, forestry and private equity. Its subsidiary, CEE Fund Advisory GmbH (CEEFA), has now won a new mandate to provide investment advice to an infrastructure debt fund launched by an internationally renowned alternative investment fund manager. With a target volume of one billion euros, the fund will acquire tranches of infrastructure project loans. The fund’s project finance and distribution partner is Deutsche Bank.

Infrastructure projects are becoming increasingly attractive to institutional investors
The nature of infrastructure loans makes them especially suitable for institutional investors. In the future, they will be treated preferentially under the regulatory capital requirements for insurance companies. “Road projects, new hospitals and large power plants based on renewables all involve long-term funding and are comparatively low-risk, which meets the requirements of institutional investors. The newly launched infrastructure debt fund is therefore a suitable addition to the portfolios of insurers or pension funds,” explains Jan Kiel, CEO of CEEFA.

Political support for private sector involvement in infrastructure loans
New public sector infrastructure construction and the upgrading of existing infrastructure are being driven by private capital. Politicians welcome and support this involvement. This is reflected in regulatory changes for insurers and other institutional investors. As of 2 April 2016, the European Commission, among other things, simplified the requirements for infrastructure investments based on debt capital instruments under Solvency II . As a result, certain infrastructure investments will be treated preferentially in terms of the capital charges. Such investments may therefore generate higher returns on equity than other investments with similar ratings and maturities. Institutional investors are increasingly recognising the economic and regulatory benefits of investing in infrastructure projects. This is reflected in increased demand for such investment opportunities. The infrastructure debt fund advised by CEEFA gives interested institutional investors access to Deutsche Bank’s project finance portfolio and pipeline on the basis of an exclusive agreement with the bank. The fund invests in specific projects at an early stage and will therefore be able to generate revenues without delay. Initially, there will be two economically separated sub-funds of about EUR 500 million each. Interested institutional investors can already subscribe for the first sub-fund, which focuses on infrastructure debt investments in euros. The second sub-fund, with a focus on similar US dollar investments, is due to follow in the course of 2016.

1 Official Journal of the European Union, DELEGATED REGULATION (EU) 2016/467 OF THE COMMISSION dated 30 September 2015